Growth in the use of crypto coins in Latin America for savings and remittances


Bitcoin and crypto emerged from the financial crisis of 2008 and in the last ten years, more people have become convinced that their money should be controlled by them rather than by the banks, the money should be difficult, i.e. have a fixed supply and the money should be global and we should be able to trade and transfer without restrictions.

Growth in the use of crypto coins in Latin America for savings and remittances. Image: Flickr
Growth in the use of crypto coins in Latin America for savings and remittances. Image: Flickr

This sentiment is reflected in the fact that more users are adopting crypto, more developers are making decentralised applications and more investment is being made every year.

Technologists and economists agree that the future of money is without intermediaries. Banks are gigantic machines that increase inefficiency and block processes for days that should take minutes. One example is the international remittances. It is an industry of more than $100 billion and banks have not yet discovered an easy way for small business owners and retail users to transfer money across borders without the hassle of filling out forms, getting a stable monetary conversation rate, lower rates and a settlement time that can take days.

Aximetria, a company that launched a mobile crypto application from Switzerland, sees Latin America as a large market that opts for savings and remittances through crypto. His data shows a much greater preference for crypto as a vehicle for savings and investment, as well as for remittances from Latin America compared to other geographies.

While savings seem to be the main reason why users have crypto, remittances are also becoming a large market. These data may not be sustainable on their own, but they are perfectly consistent with other data on the use and growth of the World Bank and other independently conducted surveys.


Savings and investment vehicle

Bitcoin and crypto have always been perceived as insurance in case traditional financial markets collapse as they did in 2008. This is the most common reason why people buy and invest in cryptocurrencies.

Despite volatility, with the advent of stable currencies, users who do not trust their banking system can store their wealth in stable currencies and thus reduce the risk of losing their money in the event of a bank collapse. Stable currencies are cryptocurrencies in a chain of blocks that are backed by fiat in reserve. This means that they are not as volatile as crypto coins tend to be, but they have all the benefits of a good cryptocurrency: full custody, easy to maintain and transfer, and low transfer fees worldwide. This makes them an attractive savings vehicle.


The World Bank recorded the highest remittances in 2018. This means that companies are globalizing and that represents only $529 billion in remittances to low- to middle-income countries. The growth rate of 9.6% compared to the previous high in 2017. With the internet, companies have globalized. Products can be manufactured and shipped anywhere, making every small business a multinational enterprise.

Mexico alone accounted for $36 billion in remittances. 

The global average cost of sending $200 is approximately 7%. That's too high compared to a crypto transaction that could have a flat rate. The World Bank report also says that banks are the most expensive remittance channels that charge an average fee of 11%.

Latin America represents remittances worth $88 billion with a growth rate of 10% each year. Colombia and Ecuador showed growth of 16% and 8% due to migrants in Spain.


A recent report also says that maximum users of crypto coins tend to come from Turkey and Latin America. This survey was conducted in 46 countries and it turns out that Brazil, Colombia, and Argentina rank second, third and fourth. Eighteen percent of Brazilians said they owned or used crypto coins. This number is also growing at a rapid pace.

The main reason for users to make transactions in crypto coins for remittances is high bank fees. A 7% transfer fee can mean that a very high amount of someone sends $10,000 to their home from a country they are working in. In addition, smaller amounts attract a higher rate and even a processing fee.

The second reason is the currency conversion costs. When we transfer fiat to another country, the bank converts it into the fiat of the receiving country and that makes the bank charge a fee because they have to protect themselves against any fluctuation in international exchange rates. In contrast, encryption rates tend to be much lower and a flat rate even if the amount is very high. For example, you can transfer a thousand or a million dollars on the Bitcoin network and the rate will remain the same. This is much more convenient.

Time delay is another reason. Banks take a few days to make international remittances and settlements before the money appears in the recipient's account, while in crypto it takes less than a few minutes. These inherent advantages make crypto very attractive to users.

By Mexicanist